Vietnam police arrest two for direct selling fraud scheme

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Police in Ho Chi Minh City on Wednesday proposed four charges against two people who ran an online multi-level marketing fraud that cheated more than 10,000 people out of money.

Nguyen Tran Hoang, 24, is in custody for the investigation while Nguyen Thi Truc Anh, a 38-year-old woman, was left at large.

Investigators said the two opened Xuyen Viet Company in early 2011, and invitations with big promotions hooked more than 13,343 people in one year, with 2,800 of them not paying anything yet.

Each victim was asked to pay VND2 million (US$96) at the beginning to become a member.

Membership was advertised as granting access to discounts of 20 to 35 percent, and ownership of an online booth that provides regular cash bonuses of between VND5 million and 1 billion ($240-48,000), villas and cars, depending on how many new members they pull in.

Members filed complaints after they received nothing from the company.

The scheme's advertised website www.binhongiathitruong.com.vn/" does not exist, police said.

Police have identified 50 victims who have invested more than VND4.43 billion in the company.

They had paid more than the basic membership fee to become VIP members to earn better bonuses, without having to invite new members.

Investigators are calling for other victims to come out and help with the investigation.

Thanh Nien newspaper has also received complaints from victims of a similar business in Ho Chi Minh City named Van Phuc Company, which charged VND3 million for membership but had tricked many to pay six times that to be VIP members.

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But the company suddenly shut down last month.

Its advertised address at 12 Cau Xeo Street, Tan Phu District, is now vacant and its website address does not work. Pham Van Thinh, the company director, did not answer his cell phone.

Late last month, the Ministry of Public Security also arrested the boss and five senior employees of city-based multi-level marketing company Tam Mat Troi, which allegedly swindled $11.2 million from 39,000 using a similar fraud model.

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